Time To Scrap All Music Industry Licensing Schemes

from the a-house-of-cards dept

It's impossible to be a legal innovator in online music these days. No matter what you do, you will run afoul of some kind of music licensing issue. That's because of the way that copyright law is designed. Basically, each time some new technology comes along that doesn't fit with the way copyright law used to work, the copyright holders run to Congress and demand yet another new "right" to be included in copyright -- and anyone who wants to do anything has to now pay for yet another license to cover that right. The end result is a comical house of cards that no one can actually figure out -- and you're pretty much bound to be sued by someone for violating one of those "rights," if you do anything even remotely innovative. At MidemNet, in one of the panels I watched, an executive complained that for every track one startup streamed online it needed to negotiate eight separate licenses. And that's not the worst of it. At a panel last week, execs from all over made it clear that things aren't about to get any better at all. Instead, it's just a bunch of legacy industry execs who keep demanding that the government grants them more rights.

But here's the problem: no one is providing any actual evidence that these rights are necessary. So let's scrap them all.

Plenty of musicians are showing that they can make good money by embracing new business models that have nothing to do with these antiquated licensing schemes. So why not get rid of them all and just let the market work. The end benefit would be great for everyone except the folks in collections societies who have made themselves a fantastic living sitting in the middle collecting money. Musicians would still make money by embracing new business models, and the ability for internet startups to actually innovate without getting sued or having to pay multiples of any possible profits to guys in suits doing nothing, would help grow the music industry many times over.

But, instead, we just hear from the folks representing the industry trying to add new licenses to the mix insisting (falsely) that they are somehow needed for the industry to survive. So we slap on another unnecessary layer that's really just designed to keep the guys in suits rolling in cash, but has nothing to do with helping out the actual musicians or creating more music. Meanwhile, the collections agencies -- the SoundExchanges and the ASCAP's of the world -- insist that a new license layer is a great thing, and they're more than willing to step up to be the ones to collect it. But it's not necessary and the answer is to go in the other direction.

We don't need to add more music licenses. We need to get rid of the old licensing regime. Entirely.

Even copyright attorneys are realizing that this is leading to the death of copyright. Layering licensing right on top of licensing right is building a house of cards that has to collapse. Copyright attorney David Post talks about the ridiculous situation of trying to determine how one would go about getting all the proper licenses for one of the thousands of increasingly viral videos made by people using Microsoft's Songsmith software, combined with vocals from classic music hits. As Post notes, that's definitely a creative endeavor -- the sort that copyright law is supposed to be encouraging. But he notes that copyright doesn't scale. All those different licensing rights make it impossible to actually get all the rights necessary to make that sort of creativity legal. After going through the impossibility of getting the licenses for just one of those videos, he asks how you would do it for the 100,000 Songsmith-inspired videos on YouTube alone -- not to mention those not even found on YouTube, or which will be loaded up in the future.

We've built a copyright system by having politicians incorrectly accept the screaming complaints of legacy industries every time some new technology comes along. So they add another layer of complexity to that house of cards, and we've now reached the point where it's impossible to innovate legally -- and even doing basic creativity puts you at significant risk. Yet, there's ample evidence that none of this is actually needed for musicians to make a living making music. It's time to recognize this and look to just wipe out all of these unnecessary legacy artifacts of a dead system, and clear the decks to let real innovation thrive.

Music licensing is no house of cards

Layering licensing right on top of licensing right is building a house of cards that has to collapse.

I wish your metaphor was correct, but rather than a house of cards, which implies a flimsy structure, music licensing is probably much more like an old, crumbling building. Its foundation is weakening and it's in disrepair, but it probably won't collapse without help of a wrecking ball.

Re: Re: Re: Music licensing is no house of cards

Taking up the cause...

I'm with you, but what political forces are out there taking up this cause? Are there any lobbying groups with any clout espousing these principles? How about influential members of congress? Let us know so that we may lend our voices to the chorus. Thanks.

A pipe dream

Do you really think this possible Mike? You might as well pop over to the Middle East and make peace between the Arabs and the Jews while you're at it.

Agreed, the current system is a pointlessly complex mess of legislation from different era, but wouldn't a better step be towards heavily streamlining the system to one that makes sense in the digital age?

Re: A pipe dream

Agreed, the current system is a pointlessly complex mess of legislation from different era, but wouldn't a better step be towards heavily streamlining the system to one that makes sense in the digital age?

The problem is that if you talk to folks in the industry -- even *that's* not remotely possible. So, why can't we, as citizens who are having our rights stripped away, stand up and ask to take our rights back?

Amusing

I won't comment on anybody's current political affiliation or voting record because I don't know, but I always find it simultaneously amusing and depressing that citizens incessantly complain about the way their government and its politicians are operating (in this case copyright laws), and then turn around and continue to vote for them. Democrats continue voting for democrats simply because they aren't repubicans, and vice versa for the republicans. This is only a pipe dream because voters insist on voting for politicians that believe that government interference can actually make any market better.

You would think there would be a much more noticeable contingent of conservative/libertarian voters on internet forums as the result of access to enlightening sites like techdirt, but sadly that is not often the case. As a result, we got stuck with Bush for 8 years, and now Obama for what will probably be 4 years. Tsk...

Mike, your logic is so twisted you must hurt yourself trying to think of these things.

"Plenty of musicians are showing that they can make good money by embracing new business models " - yes, and plenty of musicians have shown that they can make good money by embracing the old business models. Nobody is stopping musicians from NOT signing to a record label and doing it all themselves. Your own example Corey Smith or whatever his name is.

The mistake is assuming that the business model (existing) is only about record music / sell music. It isn't. Writers, producers, distributors, retailers, radio stations... there are tons of people involved in the current business model all making money. Artists make more money because they become well known because they are played nationwide on radio, on MTV, etc. They can go on tour and sell out similar sized rooms all over the country and make a living.

Music is an international business, one that requires exposure for artists to truly make it to the top. Without worldwide exposure, artists end up being regional novelties, please see the UK music scene. Most of the "top artists" involved there are pretty much one and done, not making enough money to avoid having a real job in the end.

You also have to understand copyright and authors rights, which extend for a very, very long time. For the longest time, every time someone performed, sang, or played happy birthday on TV or radio, Michael Jackson made money (he owned the rights to the song). You cannot just randomly sweep away existing rights just because it doesn't jive with your "digital stuff should be free to reproduce itself" mentality.

Re:

Did your post actually have a point or did you just want to contradict Mike's article without actualy explaining why?

The mistake is assuming that the business model (existing) is only about record music / sell music. It isn't. Writers, producers, distributors, retailers, radio stations... there are tons of people involved in the current business model all making money.

And this contradicts Mike's point...how exactly? You seem to be saying that the people who currently make money in the music business are somehow owed a living in perpetuity. You might has well have said "This new horseless carriage thing will never work because all kinds of people are making money from selling buggy whips."

Music is an international business, one that requires exposure for artists to truly make it to the top.

Again, how does this prove that Mike's logic is "twisted"? Music requires exposure, huh? Well see, there's this thing called the Internet...

You also have to understand copyright and authors rights, which extend for a very, very long time.

You may disagree with Mike's conclusions, but you must really be new around here to think that Mike doesn't understand copyright and author rights.

Re:

Mike, your logic is so twisted you must hurt yourself trying to think of these things.

Harold. Over the past week we have shown you to be factually incorrect and/or ignorant in almost every statement you have made on this site. For you to then start off your post with an insult -- without ever apologizing for your previously wrong statements suggests that perhaps rather than throwing insults around, you might want to spend some time learning a bit. Otherwise you might make folks around here think you're foolish. And I'm sure you wouldn't want that.

The mistake is assuming that the business model (existing) is only about record music / sell music.

We've never made any such statement. In fact, we've been arguing exactly the *opposite*. It's only when you focus on trying to sell music do you run into business model problems. Instead, if you focus on that wider ecosystem, you realize there's no business model problem at all.

Writers, producers, distributors, retailers, radio stations... there are tons of people involved in the current business model all making money. Artists make more money because they become well known because they are played nationwide on radio, on MTV, etc. They can go on tour and sell out similar sized rooms all over the country and make a living.

Again, who said otherwise? In fact, just last week in response to one of your ridiculously wrong statements, we made that very point. Now you're coming here to repeat it back to us?!? Yikes.

Music is an international business, one that requires exposure for artists to truly make it to the top. Without worldwide exposure, artists end up being regional novelties

Indeed. Which supports our position. So I'm not sure why you are bringing it up.

You also have to understand copyright and authors rights, which extend for a very, very long time. For the longest time, every time someone performed, sang, or played happy birthday on TV or radio, Michael Jackson made money (he owned the rights to the song).

Well, this is false for a variety of reasons. While Warner Chappell claims to own the rights to Happy Birthday, recent research has shown that they don't actually own the rights to it:

Yet, due to this crazy licensing scheme, simply because they CLAIM to own the rights to this song that even the "authors" almost certainly didn't write, they've been able to collect millions.

Michael Jackson, while he has owned many song rights, has never owned the rights to Happy Birthday. Not surprising, of course, that you would be wrong about this.

You cannot just randomly sweep away existing rights just because it doesn't jive with your "digital stuff should be free to reproduce itself" mentality.

Actually, you can. Copyright laws and regulations change quite frequently, mostly adding unnecessary new monopolies, but they can just as easily take them away. It's a power of Congress granted by the Constitution.

So... once again, another Weird Harold post where he displays his rather stunning ignorance.

Piracy/Illegal downloading

Adding my two cents.
I've been writing songs for twenty years faithfully in my own isolation. Many tired nights & years for that matter, of staying up recording music, vocals,composing,arranging,mixing, mastering,remixing,remastering,re-everything! many times to only trash the composition in the end, & that's on just one song, imagine many! I suppose i'm lucky in that way but not many artist are.
I didn't really pay attention to who said what,but i believe the person that was saying basically that the music business is international & that distributors, manufactors,radio e.t.c. need to make their money has a point that trumps all else. It seems to me it depends on which side of the coin you're on is the way you'll lean.
Imagine one song as a pie, now imagine how many hands are in that pie. Yes at a food restaraunt one person can make that pie' but in the music industry often before a song is complete there might be ten to twenty hands in comprising that master piece. There's the artist, the arist vocal coach perhaps,the music composer,the music arranger, the vocal arranger, the studio musicans seperate from the actual players,the writer & or writers, perhaps the arranger for the lyics,the music producer,the executive producer,the music publisher,the lyric publisher,back up singers, studio time, engineering cost,mastering cost,mixing cost,advertising cost, promotions cost,attorneys,record company, your little brothers friend who swears he had input on song creativity & i'm certain a few others i failed to mention. Now imagine that same many people on the next song & every song thereafter! you do the math. All these people banning together to bring lovely music to your ears, & what should they expect in the end. Someone twisting their arms to buy it for 0.99 cents, & the industry has even said that's fine, but when you want to share it to death online, not to mention put it out there in ways the artist wish not to be displayed is wrong whenever you get done with it! Imagine how much work have to be put in just to earn! after the examples above.
I suppose all of you who disagree won't mind all artist saying "Oh! the hell with it" & make you listen to old music the rest of your lives.
Odviously i'm not known' with much lovely music to offer believe me! But if i can't compensate for my endless life of sweating to create & countless money spent to learn my craft i won't release it until something change's & i'm fine with that.
I don't mind you sharing music in the shade of our own live's as have always been done in the past, but when one wants to single handely share share share! others creations all online & make money off all the mentions above while the creators suffer & yes they do suffer! than i have a problem with you. Try & suceed at creating master pieces than see how intellectual it becomes!

Well, within reason

Well, creators & distributors should still be protected by SOME rights, basically:

-To not have their work used or distributed w/out their consent.

A purchase is an agreement between two parties, which often does and must come with limitations and obligations for both.

(If they don't want to give consent for something the consumer wants, the consumer doesn't buy, and that's how the market works it out...)

This should be clearly defined at point-of-purchase. Hypothetically,

"You're paying to:
-Play my music where you want to, even as background music in the live presence of customers whose main transaction is to pay for something else.
-Even to copy onto solid storage (maybe of whole contents?) you can hand to friends/aquaintances.

But NOT to:
-Broadcast, distribute or copy over a network.
-Integrate w/ any other media (unless I've said it's ok), b/c I don't want my work appearing in your P.O.S porno, hillbilly website, or crappy dance song.
-And you certainly can't do that for as little as you're paying me now.
-And I certainly don't want you getting paid for my work, without including me in proportion.
-And you certainly can't try to pass it off as your own work.

If you think that makes me too greedy, then don't buy from me."

*Maybe this could be taken out of government's hands and be on the shoulders of creators/distributors to protect themselves contractually with their customers. Then you'd get into how aggressively they'd have to follow up on that, how strongly they'd have to sue to see the contracts followed, and if its fair to ask companies to have to do that just so they don't get ripped off.

I think it would be more fair to have a breach of such contracts be considered a criminal offense, to reasonable extents depending on the magnitude of the breach.

*Just because we can't prevent something doesn't mean there should be nothing that protects us from being forced to embrace it (no matter how wise embracing might be)... I know when I go on the road that there will be, guaranteed, speeders & drunk drivers, that doesn't mean they should be allowed on the road.

*Better business models or not, creators/distributors should still have their right protected to choose if they want to be part of it, if we want to keep the market truly free. Behind all rights, the key is preserving our choice.
If the consumer doesn't like the terms, he/she just shouldn't buy.

Re: Well, within reason

But why are people setting themselves up with a business model where they are doing work without getting paid and then expecting the government and the legal system to support them getting paid (WELL beyond the effort put into the work), as well as removing their customers' "right of first sale"?

Yes, this is the way it has been. But the big question isn't the industry's "how do we keep it this way?"...it is the public's "why is it this way?".

Re: Re: Well, within reason

Very good point mobiGeek. A relevant example of a bad business model that doesn't deserve government protection:

* Remember those film companies that would sell you cheap (or free) camera film, but you had to use them to develop it? If people took free film and developed the pictures at home in their personal dark room they have broken a contract. Should our courts spend time and money to protect a such bad business model?

If a company puts a pile of goods on the street corner with a money jar and a sign demanding that customers must pay, no one is going to feel bad if everything is gone in the morning. A company's business model has to be able to stand on its own without government intervention. Anything else in unsustainable.

Like we have a choice....

"and then turn around and continue to vote for them."

When was the last time a third party candidate was in the running for a presidential election? I'm not talking throwing money around trying to buy a spot(Perot?), but actually nominated and made it far enough thru the process to show up on the final ballot as a valid candidate? Yeah, that's what I thought....

If your only coin has two 'bad' sides, do you pick one or hope that it lands on it's edge (ie. vote "None of the Above")?

Waiting for the Ballot

I'm waiting for the ballot with the following options:

1. Democratic Party (more of the same, blame focused on the Republicans)
2. Republican Party (more of the same, money for the rich and blame for the poor)
3. REVOLUTION (scrap all this two party crap, fire ALL existing politicians, eliminate their lifelong retirement packages, then appoint interm candidates from a jury duty type pool of the general populace, office posting determined by general profession (the only people who have any business in politics are those who don't seek office on their own), so you were an accountant, we'll find you an admin position, you were a janitor, we'll find you a civil service position, you were a lawyer, sorry, we're not appointing any lawyers, they were the start of this whole mess).

I lost all my marbles and tried to buy them back with my .02, but the RIAA took it and claimed it was due for licensing because I was humming 'Yankee-doodle-dandy', so now I don't have anything....

Re: Buy the rights

As this article points out, there's a damned good chance that "buying the rights" may not even be possible, or at least not without a massive legal effort.

The industry claims blanket licensing on broadcasting of any and all works. There are many stories of independent artists having their own music restricted or pulled off websites, even their *own* websites.

Re:

Aren't those different types of innovation? It's one thing for an artist like Trent Reznor to come up with innovative business models, but that's a very different type of innovation than the sort of thing that web services like Last.fm or Muxtape or Blip.fm, or Pandora, etc etc, have been doing (or trying to do).

There's innovation in ways to connect with fans and give them something that they want to buy, and then there's innovation in services and platforms and distribution surrounding music. Sure, artists can do what they want with their own music (provided they and not their labels own the rights...), but it's the latter type of innovation that's really hampered by licensing schemes.

Re: Re:

Exactly. Blaise highlighted the point that I meant. The innovation I was talking about wasn't some artists doing some stuff... but the online services that would make it EASIER for MORE ARTISTS to better get out and promote their music.

Why not scrap them and let the market work?

While I agree that the old music is locked up by the old titans, there's nothing stopping the next generation of musicians from doing whatever they like with the copyright to their music. Many of them are embracing MySpace and many of the other tools out there. Alas, I don't think any of them are doing that well with the brilliant new strategies provided by the internet dreamers. Most of them sign with an old-style copyright "fascist" whenever the fascist pulls out the wallet. The artists, after all, like the idea of being paid for their work. Sure, the old-style content czars may steal 90% of the money, but that 10% is better than the 100% of close to nothing coming from the innovations and pipe dreams.

Re: Why not scrap them and let the market work?

While I agree that the old music is locked up by the old titans, there's nothing stopping the next generation of musicians from doing whatever they like with the copyright to their music

Not true. Thanks to industry lawsuits, musicians cannot release their music on old file sharing systems like Napster (sued out of existence), Grokster (ditto) and others. They can't leverage services like Seeqpod or Muxtape to help promote their music.

They're being stymied if they try to use innovative services.

Alas, I don't think any of them are doing that well with the brilliant new strategies provided by the internet dreamers

I'm guessing you're new here. For about a decade we've been providing examples of musicians doing quite well using these models -- in spite of the established industry's efforts to make them more difficult.

he artists, after all, like the idea of being paid for their work.

This assumes, totally incorrectly, that they're not paid for their work in other models. Tell that to Corey Smith, who made $4 million last year giving away his music for free. Or Trent Reznor who made $1.6 million in a week giving away his music. Or Jill Sobule who's latest album was profitable before it was even released because she employed these new business models, rather than doing a label deal...

NO DUH!

I've been saying precisely this for the LONGEST time! If the music industry expects to stay alive, they HAVE to be willing to change and adapt.

Case in point: When Sam Walton started Wal-Mart, it wasn't NEAR the size it is now, but he stuck with it, and changed what needed to be changed within his company, and adapted to whatever other things that happened as they came along. Now, you can't drive down the road for five miles without seeing a Wal-Mart Supercenter. I remember Target not being anywhere NEAR the retail store it is now, in that there wasn't all this usage of design, as well as stiff competition from Wal-Mart to mess with them. But their owners decided that if they wanted to stick around, they had to change and adapt as well.

Now, if only the music industry can pull their heads out of their collective asses and get a clue, and change what needs to be changed from the stand point of their business model, and adapt to whatever other changes come their way, then they'll be fine. Besides, with all the computer technology and audio software that is WIDELY available to every single musician out there, they can always make their own CDs and sell them their own selves, and reap a full profit, which is EXACTLY what musicians should do. WHY? Because they're the ones with the talent. Why should they have to pay someone else to market their music, when they can do it themselves by either setting up a website their own selves, or having someone do it for them, or starting their own Facebook page, Myspace page, Twitter page, what have you, for the sole purpose of letting people know where they can find them online and purchase their music directly from them? This whole "copyright" thing is so misused anyway, especially nowadays, seeing as how this whole business of sharing music online has been TOTALLY misconstrued and misinterpreted as teh evilz!!11!1 Seriously, it's time for the music industry to accept the fact that people are going to share music online, and there's NOTHING they can do about it. No form of copy protection/rootkits/etc. will prevent that from happening.

Re: NO DUH!

"Besides, with all the computer technology and audio software that is WIDELY available to every single musician out there, they can always make their own CDs and sell them their own selves, and reap a full profit, which is EXACTLY what musicians should do."

Yes, and *you* should *work for free* and hope that someone notices and gives you money to live on.

Seriously, there is a *huge fucking difference* between having your friend with a burnt copy of Pro Tools and a *real engineer* record your music. Instruments cost money, practice space costs money, recording costs money, and, contrary to what you armchair music industry pundits think, gigging generally costs money, unless you are an established act.

Not that anyone gives a shit, as long as they don't have to *pay* for anything, right?

It takes more time and discipline to master an instrument than many professions require, yet you *demand* that musicians starve because you can steal their work easily. If it suddenly became incredibly easy for me to empty your bank account, I guess it would then be cool for me to do so.

Re: Re: NO DUH!

It takes more time and discipline to master an instrument than many professions require, yet you *demand* that musicians starve because you can steal their work easily.

Can we please drop this logical fallacy? No one says the musicians don't earn money if they give their music away for free. We've got nearly a decade's worth of examples that prove that's totally wrong.

Nonsense

Make em simpler and up to date = YES!
Scrap em?? = Total BS if u ask me.
Startup/private citizen/Corporate Business are all the same to me: If u want to use something that does not belong to you, you pay for it. period.
Hey... food aint for free for the poor... why are the "rich"(u know what i mean) complaining about music licenses??

Fuel

Like gasoline is to the automobile, music related technology is useless without fuel(music).

I don't believe anyone has ever suggested that laws, licenses and fees required to drill for oil, refine it, and deliver it to a gas station so it can be pumped into your car should be abolished. If someone did make that suggestion and, against all odds, it became reality, oil would stay in the ground ... and people would be pushing their cars around town to make them 'run'.

It's the same with the layers of intellectual endeavors that have to come together to make it possible for a song to come out of the head of its creator, find the right artist to sing it, producer to produce it, background musicians and singers to perform on it, engineers to mix and master it, marketers to market it and financiers to fund it before it becomes the recorded fuel that makes music related technology operate.

If, per your suggestion, laws, licenses and fees required to encourage people to become proficient in, and hopefully make a living from, the various specialized fields of endeavor needed to deliver interesting and exciting music to the consumer were removed from the path of technology's march to the sea ... those who would have been inclined to take up music and music related endeavors on a profession basis would simply find something else to do with their lives and the torrent of great new music that has been pleasing the public since the invention of recording technology would dwindle to a trickle.

Mike, you always use the self contained artists playing clubs and selling t-shirts as your model for music's future. There's no future for artists using that model. The total lack of enthusiasm for music offered via the Creative Commons is undeniable proof of that fact. In this click to delete world an artist's shelf life (if they can even get on the shelf in the first place) is about as long as their zany YouTube video stays hot ... Besides, what moron would think spending 40 years playing rotten clubs would be a life worth living.

You also like to point to Trent Reznor as an example of what artists can do without labels... and seem to indicate that unknown artists could follow the same route and achieve similar results... One missing element each time you use Nine Inch Nails as an example is the fact that the group is a long time well established super BRAND built by their record label. So, of course, is the Grateful Dead.

In this world of deposable music, I believe we are seeing the end of the era of mega brand artists - so, while the Nine Inch Nails example could be more damaging to labels than piracy in the future (because artists will use the labels to help build their brand then go out on their own when their contracts are over), it is disingenuous on your part to suggest that the formula will work for unknowns.

Most unknown acts will never have the money or the carefully constructed public persona to do what Reznor did ... and, if they tried, 95% of them would be flushing their money down the drain because the percentage of successes to failures has not changed since the world went digital.

As to the organizations you wish to have abolished, you display a profound lack of understanding as to what they do. You really should bone up on how they operate, before trying to give them the bone. Two of the organizations you mention are not for profits - they don't produce fat cat middle men - they negotiate rates and fees, license, collect and protect rights on behalf of their members, and pay out every penny they take in - less overhead costs (between 10-15% of gross.) It would be impossible for an individual artist - or songwriter - to do 1% of what these organizations do on their behalf and still find time to create and promote their music. Something to do with the concept of collective bargaining I believe.

You should really try to understand what at you are talking about before passing yourself off as an expert in the field of music. You do a great disservice to yourself, your readers and to music.

By the way, I hear you will be keynoting the Leadership Music Digital Summit in Nashville. One thing you might wish to keep in mind is that your audience will include a good number of digitally hip music industry professionals and professional creators. Try to feed them the kind of clearly uninformed malarkey you presented in this blog, and I guarantee you they will hand you your head. This won't be the standard unenlightened college student and uniformed Tex Nobody artist wanna-be crowd that usually show up at these sorts of events you will be facing.